The challenges of cross-border divisions within the EU

Cross-border divisions represent an efficient restructuring method allowing competent economic actors to suppress potential negative synergies within a conglomerate or to reinforce a company’s share price by correcting an asymmetry of information. Despite their protection by freedom of establishment and their partial harmonisation by the recent EU Directive 2019/2121, they remain largely unexplored and their effective implementation remains obscure. Furthermore, this kind of operation generates significant challenges in terms of stakeholder protection that need to be addressed in an adequate manner to avoid any leeway for abusive behaviors. The present research will propose a sophisticated solution to these challenges through a detailed analysis of the caselaw of the European Court of justice on freedom establishment and an extensive comparative exercise with (i) the existing EU regime applicable to cross-border divisions by incorporation and cross-border mergers, (ii) the cross-border division regimes existing under Belgian and Luxembourg company law and (iii) the German, Austrian and French domestic division regimes.